Indicator 9: Surcharges and Penalties Issued

Indicator Description:

This report reflects the number of surcharges and penalties issued to insurers in the calendar quarter. It is another way of measuring compliance with submission of required reports and making timely payments. Penalties are issued for unexcused delayed payments. Surcharges are $100 fines for failures to submit required reports promptly. Prior to April 1, 2006 surcharges were known as forfeitures.

Compliance Requirement:

Insurers are required to comply with DWD s. 80.02 with respect to submitting required reports and are subject to s. 102.22, Wis. Statutes with respect to penalties for making delayed payments. Sections 102.35 and 102.22, Wis. Statutes state the penalties for violations.

Standard or Benchmark:

There is no standard set by statute or rule for this indicator. The benchmark used for training and educational purposes is to maintain the ratio of surcharges and penalties to claims under 3%. In other words, to handle 97% of compensable claims without penalty.

Source of Indicator Data:

The source of the data is information on surcharge and penalty letters recorded within the WC Integrated Claims Management System (ICMS). The program identifies surcharges (only those not rescinded) and penalties assessed against the insurer during the quarter.

Computation Methodology:

The number of surcharges and penalties assessed during the quarter is divided by the number of paid claims reported via form WKC-13 for the quarter. This establishes a ratio of surcharges and penalties to claims received during the quarter.

State of Wisconsin Averages:

What This Indicator Measures:

This indicator measures the percentage ratio of claims received to surcharges and penalties issued during the quarter, year-to-date and 12 quarter history. A surcharge is issued when there is a failure to comply with a reporting requirement; for example, a failure to submit a First Supplemental Report or a Final Medical Report on time. A level of claims to surcharges and penalties over 97% is generally acceptable.

Explanatory Comments for Current Indicator:

Publication of the industry wide performance for this indicator has been temporarily suspended due to the WC Division’s backlog in processing supplemental reports (responses to claims correspondence).This backlog has caused auto-generated surcharges to be levied on claims simply because responses to correspondence have not yet been processed, thereby artificially inflating the number of surcharges for the 3^rd quarter of 2011. As the backlog is worked through surcharges will be rescinded and this will be reflected in future rolling 12 quarter data.

Indicator 9: Surcharges & Penalties Issued
Group A - Large Insurers (400 claims or more per year)
Group B - Medium Size Insurers (65-399 claims per year)
Group C - Small Size Insurers (equal to or greater than 65 claims every 3 years)

PLEASE NOTE: Quarterly summary reports are static, a snapshot of performance reflected by our database the day prior to the reports being run. As such, actual performance may be different due to changes to the claims for the given quarter after the reports are run than performance captured in the PDF.

Due to the WC Division backlog in processing supplemental reports, the Indicator 9 detail level data will not be published until further notice.

Second Quarter 2011